Advisory Tax Panel Recommendations - Residential Real Estate Provisions
National Association of REALTORS®
Recommendations of the President's Advisory Panel on Tax Reform
Residential Real Estate Provisions
| Current Law | Simplified Income Tax | Growth and Investment Tax | ||
| Mortgage Interest Deduction – Interest on mortgage debt up to $1 million may be deducted. | Deduction converted to a 15% tax credit. One million dollar limitation on mortgage debt reduced to FHA loan limits (currently $172,000 to $312,000). | Same as Simplified Income Tax. | ||
Mortgage Interest Deduction – Interest on home equity indebtedness of up to $100,000 may be deducted. | No deduction permitted for home equity loans. | Same as Simplified Income Tax. | ||
Mortgage Interest Deduction – Second homes. The $1 million cap includes mortgage interest on a second home. | No deduction permitted for mortgage interest on a second home. | Same as Simplified Income Tax. | ||
$250,000/$500,000 exclusion on sale of a principal residence. These amounts of gain are tax-free on the sale of a principal residence so long as the home has been used as a principal residence for 2 of the previous 5 years. | Excluded amounts increased to $300,000/$600,000 and indexed for inflation. Two-year use requirement increased to 3 years. | Same as Simplified Income Tax. | ||
Property Tax Deduction – Homeowners may deduct the full amount of property taxes paid (as well as state and local income taxes). | All deductions for property tax and state and local income tax REPEALED. | Same as Simplified Income Tax. |
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